Nexus between Charities and Terrorist Financing In Indonesia

Author(s): Sylvia Windya Laksmi

Source: Counter Terrorist Trends and Analyses , Vol. 11, No. 7 (September 2019), pp. 6-
10
Published by: International Centre for Political Violence and Terrorism Research

Stable URL: https://www.jstor.org/stable/10.2307/26778274

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 Nexus between Charities and Terrorist Financing In Indonesia
Nexus between Charities and Terrorist
Financing In Indonesia
Synopsis
Around the world, charities often play a critical
role in complementing governments and the
private sector in meeting the essential needs
of vulnerable communities. However, in
recent years, a number of charity and
humanitarian organisations have been
accused or convicted of using their revenues
to finance terrorist activities. The issue has
prompted international organisations such as
the Financial Action Task Force (FATF) to
recognise that charitable donations are one
component of the broader issue of terrorism
financing. This article outlines a nexus
between charity organisations and the
Jamaah Ansharut Daulah (JAD) terrorist
group in Indonesia. For the country, there is a
need for improved integrity mechanisms
within the charity sector to prevent its abuse
by terrorists. Additionally, enhanced
community awareness is needed regarding
monetary donations made by the public for
religious purposes.
Introduction
Charities are one of several channels
exploited by terrorists to solicit financial
support for terrorist activities.1 Jennifer Lynn
Bell highlights both direct and indirect ways in
which non-profit organisations (NPOs), which
include charities, could be misused by terrorist
groups. Direct misuse involves the active
engagement of an organisation in conducting
fundraising activities with the intention of
financing terrorist activities. Conversely,
1 Peter Romaniuk & Tom Keatinge, ‘Protecting
charities from terrorists … and counterterrorists:
FATF and the global effort to prevent terrorist
financing through the non-profit sector,’ Crime, Law
and Social Change, December 2017
2 Jennifer Lynn Bell, ‘Terrorist Abuse of Non-Profit
and Charities: A Proactive Approach to Preventing
Terrorist Financing,’ 17 Kan. J.L. & Pub. Pol'y 450
(2008), p. 455.
3 The Financial Action Task Force (FATF-GAFI),
‘Combating the Abuse of Non-Profit Organisations
(Recommendation 8)’, p. 15, http://www.fatf-
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Sylvia Windya Laksmi
indirect misuse includes the practice of
erroneously financing terrorist groups.2
Several factors can explain the nexus
between charities and terrorist financing. For
example, charities can be misused by
terrorists and terrorist organisations to raise
and divert funds, provide logistical support,
encourage terrorist recruitment or otherwise
support their operations. Reports of terrorists
creating “sham” charities which mislead
donors or engage in fraudulent fundraising
have also raised concerns among
policymakers and security agencies. Such
abuses not only facilitate terrorist activities but
also undermine donor confidence and
jeopardise the integrity of charities.3 Financial
donors of charities can include local and
diaspora communities,4 overseas refugees,
international guerrilla movements, religious
organisations, and wealthy individuals.
Donations can even be sourced from
legitimate business and commercial holdings
companies.5
Risk Factors Involving Charities
Charities are vulnerable to abuse by terrorist
groups for several reasons. Such
organisations enjoy ‘public trust’, have access
to considerable sources of funds and may be
cash rich. Additionally, some charities have a
presence in multiple jurisdictions that provides
a well-established infrastructure for cross
border operations and financial transactions.
Often, such operations can be located near
areas exposed to terrorist activity.6 The
gafi.org/media/fatf/documents/reports/BPP-
combating-abuse-non-profit-organisations.pdf.
4 The diaspora is defined as immigrants residing in
foreign countries who frequently support
insurgencies or terrorists in their homelands.
5 Daniel Byman, et. all, ‘Trends in Outside Support
for Insurgent Movements,’ Rand Corporation, 2001,
p 41-69,
https://www.rand.org/content/dam/rand/pubs/monogr
aph_reports/2001/MR1405.pdf.
6
‘An Advisory Guideline on Preventing the Misuse of
Charities For Terrorist Financing,’ The Government
Volume 11, Issue 7 | September 2019
 Nexus between Charities and Terrorist Financing In Indonesia

involvement of some charities in humanitarian arrested by the authorities for fund-raising,

or developmental projects also leaves them recruitment and training activities.
open to abuse as it is harder to disentangle
the sources and uses of money flows, whether Fund-raising technique
for illegitimate or legitimate purposes.7
Terrorist organisations may take advantage of Aznop Nopriyandi is believed to have initially
these or other characteristics to infiltrate the established BMU for propaganda purposes.
charity sector and misuse funds to support He is said to have set up Telegram groups
their activity.8 such as ‘UKK Channel’, ‘Melawan Arus’, ‘No
Pain’, and ‘Ulit Amri Keledai’ with the intention
of recruiting for the JAD. Within these closed
Jamaáh Ansharut Daulah (JAD) and
discussion groups, participants were
Islamic Charities
radicalised by jihadist discourse and some
later donated to the group.10
In several regions around Indonesia, Islamic
charity groups are involved in efforts to collect
Baitul Maal Al Izzah also set up an online
and disburse funds to the poor. They include
channel on Telegram. Waris Suyitno and
Islamic microfinance institutions which have
Jajang Iqin Shodiqin, as coordinators of the
emerged since the development of Islamic
organisation, also invited people to attend
banking in Indonesia. Such institutions are an
their religious events (dauroh) and
important source of financing for small
encouraged participants to donate to the
entrepreneurs who typically cannot access
organisation.11
funding for their business operations from the
larger banking sector.9 Several individuals
Fund-moving technique
linked to the JAD, an IS-affiliated local terrorist
network which has gained notoriety in recent
Between 2016-2017, third party accounts
years for several high profile gun and suicide
were used to receive and hold funds raised
attacks, have exploited such institutions with
from members of Baitul Maal Ummah and the
the intention of supporting terrorist activities.
wider community, which was managed by
Aznop Nopriyandi. Among other transactions,
One case identified in documents reviewed by
he is said to have arranged a bank transfer of
the author involved two individuals, Aznop
IDR 12,500,000 (US$ 880.23), which was
Nopriyandi and Reza Alfino, who attempted to
spent on various activities related to the
raise funds for JAD activities in the region of
organisation.12 Besides the use of bank
Medan (North Sumatra) between 2015 and
transfers, operatives linked to Baitul Maal Al
2017, through an entity known as Baitul Maal
Izzah also withdrew funds in cash through
Ummah (BMU). Separately, two other
ATMs (Automated Teller Machines). Waris
individuals, Waris Suyitno (WS) and Jajang
Suyitno is believed to have handled four such
Iqin Shodiqin (JIS), also set up Baitul Maal
accounts including one belonging to Ahmad
Tamwil (also referred to as Al Islah or Al Izzah)
Syukri, who later gained notoriety as one of
in 2016, primarily to fund JAD’s terrorist
the suicide bombers involved in a bomb attack
operations in the region of Bandung (West
Java). All four individuals were subsequently

of Hong Kong’s Narcotics Bureau, September Community-Based Microfinance in Central Java,’

2018,https://www.nd.gov.hk/pdf/guideline_e_201809
29.pdf
7 Asia-Pacific Group On Money Laundering (APG),
Typologies Report: NPO Sector Vulnerabilities, 22
July 2011,
Victoria University PhD Dissertation, February 2015,
p. 151,
http://vuir.vu.edu.au/26242/1/Mohamad%20Nazirwa
n.pdf
10 The North Jakarta District Court, 2018. Court

http://www.apgml.org/includes/handlers/get- Verdict No. 1393/ PID.Sus/2017/ PN.Jak.Utr.,

document.ashx?d=b80c8fa2-41f0-455c-91d3- https://putusan.mahkamahagung.go.id/main/pencari
7ac28b5e3d4b an/?q=aznop+nopriyandi
8 ‘An Advisory Guideline on Preventing the Misuse of 11 The North Jakarta District Court, 2018. Court

Charities For Terrorist Financing,’ The Government
of Hong Kong’s Narcotics Bureau, September
2018,https://www.nd.gov.hk/pdf/guideline_e_201809
29.pdf
9
Mohamad Nazirwan, ‘The Dynamic Role and
Performance of Baitul Maal Wat Tamwil: Islamic
Verdict No. 1328/ PID.Sus/2017/ PN.Jak.Utr.,
https://putusan.mahkamahagung.go.id/putusan/f112f
90f0cd1b0540214f55aa7d0064b
12 The North Jakarta District Court, 2018. Court
Verdict No. 1393/Pid.Sus/2017/PN Jkt.Utr.

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 Nexus between Charities and Terrorist Financing In Indonesia
on a bus station in Kampung Melayu, East
Jakarta on 24 May 2017.13
Fund-using technique
Specifically, BMU used donations for their
operations and to support the families of
detained terrorist members. Between 2015
and 2016, BMU is believed to have furnished
loans and donations to the wives of terrorist
inmates. Funds were also used to purchase
20 throwing knives for military training
purposes.14
Baitul Maal Al Izzah similarly spent money
organising dakwah (missionary activities);
providing incentives for members with medical
needs, including those of their families;
offering cash to orphans and low-income
families through social programmes; and
purchasing property that functioned as a
transit point for members of the JAD in the
Bandung area.15
Azzam Dakwah Center (ADC) - JAD nexus
Another instance of a charity organisation
being exploited by terrorists in Indonesia
involved the Azzam Dakwah Center (ADC),16
a religious organisation.17 Three individuals
linked to the organisation, Achmad Romadlan
Denny, the group’s chairman; Muhammad
Nur Solikin, a financial manager; and Agus
Supriyadi, a public relations coordinator, were
arrested in 2017 for partaking in terrorist
activities. Police sources have disclosed
several ways in which ADC was exploited as
a vehicle for terrorist financing by the JAD.
13 “Police release identities of Jakarta suicide
bombers”, The Jakarta Post, 27 May 2017, available
at:
https://www.thejakartapost.com/news/2017/05/27/pol
ice-release-identities-of-jakarta-suicide-
bombers.html
14 The North Jakarta District Court, 2018. Court
Verdict No. 1393/ PID.Sus/2017/ PN.Jak.Utr.,
https://putusan.mahkamahagung.go.id/main/pencari
an/?q=aznop+nopriyandi
15 The North Jakarta District Court, 2018. Court
Verdict No. 1328/Pid.Sus/2017/PN.Jkt Utr,
https://putusan.mahkamahagung.go.id/putusan/f112f
90f0cd1b0540214f55aa7d0064b
16 ADC is a charity organisation established in 2015
with the primary objective of raising and channelling
funds towards social activities as well as religious
festivals. Programmes run by ADC include fund-
raising activities, recitations, as well as voluntary
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Firstly, Azzam, who was a local leader (Amir)
of JAD based in Central Java, is believed to
have established ADC as a front organisation
to cover JAD’s movements. Three detained
terrorists, Imam Syafii, Triyono, and Wawan
Prasetyawan 18 have revealed that the primary
objective of establishing ADC was to conceal
the activities of JAD operatives linked to the
Islamic State (IS), through the funding of
social programs under the auspices of a
charity foundation.
Secondly, ADC’s office was used to plan two
bombing plots in 2016. Wahyudi, a terrorist
inmate, has acknowledged that plans were
discussed to use petrol bombs to attack the
retail market, Alfamart in Srangan, and a
restaurant, Candi Resto, located at the ADC’s
office in Sukoharjo, Central Java. The attacks,
allegedly planned under the instruction of Nur
Solikin, were framed as revenge over claims
that the owner of the Candi Resto restaurant
had torn pages from a copy of the Qur’an.19
ADC is said to have received funding from
several sources, including direct donations
from volunteers and members. Several charity
drives were also conducted and funds also
solicited through online advertisements and
on social media platforms such as
Facebook.20 Several known terrorists also
contributed to the ADC, mostly through Nur
Solikin, who often used his wife as a proxy to
receive these funds. Bahrun Naim, a
prominent Indonesian terrorist leader who
was based in Syria, was a notable contributor
to the ADC, primarily operating through his
wife Rafiqa Hanum. Some of the funds raised
were intended for a planned bombing plot in
Bekasi.21
donation drives for the poor, natural disasters
assistance, mosques.
17 Charlie Campbell, “ISIS unveiled: the story behind
Indonesia’s first female suicide bomber”, TIME
Online, 3 March 2017,
https://time.com/4689714/indonesia-isis-terrorism-
jihad-extremism-dian-yulia-novi-fpi/
18 The High Court of Jakarta District, 2018. Court
Verdict No. 189/PID.SUS/2018/PT.DKI.,
https://putusan.mahkamahagung.go.id/putusan/dow
nloadpdf/6b8f20f98a32ae6386e719d51810e3c5/pdf
19 Ibid.
20 Wanda Indana, “Kedok di Balik Dana
Kemanusiaan, Medcom.id, May 18, 2018,
https://www.medcom.id/telusur/medcom-
files/GbmjXzPk-kedok-di-balik-dana-kemanusiaan
21 The East Jakarta District Court, 2018. Court
Verdict No. 394/Pid.Sus/2017/PN Jkt.Tim.
Volume 11, Issue 7 | September 2019
 Nexus between Charities and Terrorist Financing In Indonesia
Funds were also used for operational and
organisational purposes, including helping
terrorists22, as well as their families. Money
was also channeled towards the purchase of
explosive materials to make bombs, and to
also establish a network of IS supporters, or
anshor daullah to fight for the jihadist cause.23
Conclusion
Protecting charities from abuse by terrorists is
a crucial component of the global fight against
terrorism. In Indonesia, the case studies
involving the Baitul Maal organisations and
the religious organisation ADC bring to the
forefront instances of religious groups and
charities being exploited by terrorists. In
assessing the nexus between these
organisations and JAD, three main themes
emerge.
Firstly, terrorists deliberately set up such
organisations as a conduit to generate money
to ensure their sustainability. Secondly,
instead of channeling money into charitable
causes, they funnel these funds into terrorist
activities, including providing support for their
members and extended families. Lastly, such
groups use social media platforms not only to
communicate with members, but also to
facilitate their financing efforts. Such funds are
also used to finance both direct and indirect
operations, such as purchasing safe houses
and transit shelters, military equipment,
weapons as well as food and fuel.
22
Yudha Satriawan, “Densus 88 Geledah Sejumlah
Lokasi di Solo”, VoA Indonesia, December 11, 2016,
https://www.voaindonesia.com/a/polisi-anti-teror-sita-
barang-bukti-di-solo-terkait-kasus-bom-
bekasi/3631682.html
23 The High Court of Jakarta District, 2018. Court
Verdict No. 189/PID.SUS/2018/PT.DKI.,
https://putusan.mahkamahagung.go.id/putusan/dow
nloadpdf/6b8f20f98a32ae6386e719d51810e3c5/pdf
24 David Kenner, “All ISIS Has Left Is Money. Lots of
It.”, The Atlantic, March 24, 2019,
https://www.theatlantic.com/international/archive/201
9/03/isis-caliphate-money-territory/584911/
25 The Regional Risk Assessment on NPOs provides
a snapshot of NPOs’ financial activities in the region,
the current terrorist financing risk landscape as well
as an assessment of threats. The report also offers
some priority actions to overcome the issues involving
NPOs identified in the assessment.
26 ‘Regional Risk Assessment on Non-Profit
Organizations and Terrorist Financing 2017,’
Australian Transaction Reports and Analysis Centre
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Despite the loss of IS’ remaining territories in
Syria earlier this year, JAD’s network around
Indonesia continues to be closely allied to IS.
Various politico-religious factors prevalent in
Indonesia also mean the country will remain a
hotbed for jihadist activity for the foreseeable
future. Moreover, IS’ adoption of an
insurgency model in the post-caliphate era
has meant affiliate networks around the world
are urged to wage jihad in their respective
local communities, and self-finance such
activities.24 In the Indonesian context, threat
groups may increasingly seek to use “benign”
charities as front organisations to finance
terrorist activities going forward.
To address the issue of terrorism financing,
Southeast Asian countries generated a risk
assessment report25 on NPOs in 2017.26 In
the same year, the Indonesian government
also issued a Presidential Decree No. 18.27
However, more robust measures are needed
to mitigate the misuse of charities for terrorist
financing purposes.
Two challenges stand out going forward in the
Indonesian context. First, there is still no
single government institution which has the
power to regulate, manage, and monitor
NPOs, including charities, in Indonesia. Such
an institution needs to be armed with sufficient
powers to verify the identity of beneficial
owners, donors, money flows, as well as an
organisation’s line of activity. Second,
techonological advances have enabled
terrorist groups to seek funding through social
media platforms28, a strategy which is often
Report,
https://www.austrac.gov.au/sites/default/files/2019-
06/regional-NPO-risk-assessment-WEB-
READY_ss.pdf
27 The Presidential Decree is focused on the
procedures of receiving and donating money by
private organisations in preventing terrorist financing.
It includes a definition of charities and requires civil
society organisations to apply a Know Your
Customers (KYC) policy to those who donate money
above IDR 5 million (US$ 384) and report any
suspicious charities linked with individuals based in
countries that are not accredited with the Financial
Action Task Force on Anti-Money Laundering and
Anti-Terrorist Financing (FATF).
28 Resti Woro Yuniar, “Support for Islamic State? In
Indonesia, there’s an app for that”, South China
Morning Post, November 8, 2017,
https://www.scmp.com/week-
asia/politics/article/2118968/support-islamic-state-
indonesia-theres-app
Volume 11, Issue 7 | September 2019
 Nexus between Charities and Terrorist Financing In Indonesia

interwoven with their propaganda efforts. The

Indonesian government should remain vigilant
on these issues and initiate appropriate
counter-measures.

Sylvia Windya Laksmi is a Ph.D. Candidate

at National Security College, The Australian
National University. She can be reached at
sylvia.laksmi@anu.edu.au.

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